China Car Market Drops For The First Time In 20 Years

Car sales in China, the world’s biggest vehicle market, have
seen their first annual fall in twenty years.

Sales fell 6% to 22.7 million units in 2018, according to
the China Passenger Car Association (CPCA).

The deceleration comes amid a slowdown in China’s economy
which has hit performance at car manufacturers around the world.

The news comes after Apple warned that sales would be hit by slowing iPhone demand in China.

Meanwhile, the country’s most successful carmaker, Geely, is
forecasting flat sales this year.

BBC Report that Foreign car makers such as Ford, Volkswagen,
Jaguar Land Rover and General Motors have all reported falls in sales over the
last few months in China.

The China Association of Automobile Manufacturers (CAAM), a
government-backed industry group, last month blamed the sales slowdown on
economic shifts and “international reasons”, referring to China’s trade war
with the US.

Last year, both countries imposed billions of dollars’ worth
of tariffs on each other’s goods.

CAAM said it expected the market to be unchanged in 2019 and
added that although demand for diesel and petrol cars was falling, rising sales
of electric cars would probably help the overall market to avoid another slump.

Government subsidies for car buying also ended last year
reducing consumer incentives to buy new cars.

However, the China National Development and Reform
Commission (NDRC) says it plans to introduce policies to boost consumer
spending on cars as well as home appliances.

NDRC vice-chairman Ning Jizhe told China’s state broadcaster that there was still potential for more car sales. He said policies such as the introduction of a rural car purchase programme, or a cut in taxes on car sales could help drive sales.

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